Gold Price Prediction: XAU/USD to Approach $1,880 as US Inflation Steals the Show

During the Asian session, the gold price (XAU/USD) aims to extend its rebound to near the important barrier of $1,880.00. Prior to the announcement of U.S. inflation statistics, the precious metal fell to a low of approximately $1,867.50 during its rangebound behavior. However, in the late New York session, the precious metal rebounded significantly.

In Asia, S&P500 futures are doing poorly; yet, the total risk profile is notably positive. On a broader scale, the alpha created by 10-year US Treasury bonds has abandoned its recovery rise amid optimism and has declined to approximately 3.55%. In the meantime, the US Dollar Index (DXY) has fallen to roughly 102.75 as the market anticipates a further deceleration in the Consumer Price Index (CPI).

According to NBF analysts, headline prices will decrease 0.1% month-over-month and the year-over-year rate will decline from 7.1% to 6.9%. This rise should have been more than offset by decreasing gasoline prices. The Core index may have continued to be supported by growing rent costs and increased 0.3% month-over-month. This would result in a two-point drop in the 12-month rate to 5.8 percent."

None of the drivers, ranging from a risk-on sentiment to an economic slowdown and a lower consensus for the United States Consumer Price Index (CPI), are exhibiting indications of recovery in the US Dollar Index after the carnage. The Federal Reserve (Fed) could be compelled to modify its monetary policy forecasts for CY2023 and beyond if US inflation figures decrease.